Colleges boost financial skills
by Amy Trask, The Seattle Times (KRT)

    SEATTLE—Jennifer Jones credits several things with helping her manage her money during her first years at the University of Washington (UW).

   First is having a mom with a mantra of “I’ll stretch a dollar ’til it hollers.”

   She also had experience with the family checking and credit accounts and worked several part-time jobs while in high school in Federal Way, Wash.

   Now a UW junior, she is one of several students who talk about finances with incoming students during orientation.

   “Where can I get grants, scholarships?” is the first question asked by one student.

   “Ah, the free money,” Jones said. “Someone always asks about that.”

   “How do I find a work-study job?” asks another.

   She explained how she searched for grants, how subsidized and unsubsidized federal loans work and how to find jobs that fit around class schedules.

   Incoming college students receive an introduction to college finances in seminars at schools throughout the country.

   Most talks focus on paying tuition through loans, jobs and grants, but increasingly, colleges are seeing the need to cover the pillars of personal finance— spending, credit, saving and investing.

   Jeff Southard, a debt-management specialist at the Northwest Education Loan Association, a Seattle-based agency, presents lectures to students and coaches university aid offices on how to work with students.

   “There’s thought that ‘I’m a starving college student. I should ignore my finances and concentrate on my school work’ and then they get into trouble,” Southard said.

   He finds many college students don’t know what they need to about managing money.

   A national organization, the Jump$tart Coalition for Personal Financial Literacy, reports that on a national test of basic personal-finance skills, 52.9 percent of students expecting to attend four-year colleges received a failing grade.

   This lack of knowledge combined with ready access to credit cards and, for many, a new-found independence, contributes to credit-card debt, which has risen on average nearly 25 percent in the past three years to $2,327.

   Defaults on student loans, however, have been in decline nationally since 1992, a fact that the U.S. Department of Education attributes to increased efforts by financial-aid offices to educate borrowers.

   On the advice of students a few years ago, Western Washington University added a budgeting component to its summer orientations to get families talking about additional expenses that a college student might incur.

   “Typically, tuition, housing costs, those are things figured out, but incidentals aren’t,” Anna Carey, director of new student and family programs, said.

   “When they add it up, they find the expenses far exceed their income, which is no big surprise,” she said.

   A very common question she gets from parents is how much money they should be giving a week, Carey said.

   At UW, summer orientations include an optional workshop on finances led by one of about 20 student facilitators. During the school year, UW collections agents help those having trouble meeting payments to establish budgets, and the financial-aid office gives budgeting tips along with information on repaying their loans.

   But Ruth Johnston, the university’s assistant controller, believed the university could do more. Last year, employees from the student financial-services office began teaching a class in money management, budgeting and investing.

   “In high school, you’d get this in life-skills classes, but not in the college-prep track,” Johnston said.

   A few organizations have used the workshop, and Johnston said there are plans to expand the offerings into fraternities and sororities.